We model contagions and cascades of failures among organizations linked through a network of financial interdependencies. We identify how the network propagates discontinuous changes in asset values triggered by failures (e.g., bankruptcies, defaults, and other insolvencies) and use that to...

While it is recognized that the high degree of leverage used by financial institutions creates systemic risks and other negative externalities, many argue that equity financing is “expensive,” and that increased capital requirements will increase the cost of credit. Public subsidies of debt...

This paper examines the effect of ownership structure on the market assessment of asset sales. Three types of ownership structures are identified: large block outside, inside, and widely held. Empirical results indicate that firms with large block outside shareholders experience significantly...

Just as portfolio managers are seeking positive alpha, corporate investors are seeking Tobin's q larger than 1. The present paper develops a quantitative framework in which this process can be analyzed, and prescriptions for concrete financing decisions can be obtained. Specifically, we focus on...

We construct a dynamic takeover law index using hand-collected data on legal provisions and empirically examine the effect of takeover regulation to protect shareholders on shareholder wealth for bidders and targets in a multi-country setting. We find that a stricter takeover law increases the...

We explore Time-Phased Voting (“TPV”), an arrangement in which long-term shareholders receive more votes per share than short-term shareholders. TPV has gained prominence in recent years as a proposed remedy for perceived corporate myopia. We begin with theory, situating TPV relative to...

I investigate whether implementation of the mandatory bid rule – the rule that grants all shareholders the right to participate in a takeover transaction at equal terms – affects target announcement returns. I use a difference-in-differences approach and the staggered adoption of the rule...

We evaluate stakeholderism in the context of one constituency—workers—by exploring a few key known contributors to workers’ economic disadvantage: concentration and monopsony in labor markets, weak collective action protections for workers, a declining minimum wage, and the harsh reality...

Articles in the top finance journals largely ignore the potential of outlier-induced bias in empirical research. When finance researchers do address outliers they use techniques that tend to cause additional problems. We illustrate the problems via simulations as well as replications of studies...